SKorea posts fastest growth in nearly 2 years

SEOUL, South Korea (AP) — South Korea’s economy expanded at its fastest clip in nearly two years during the third quarter as construction and capital expenditure offset weak growth in exports.

The Bank of Korea said Thursday that the economy grew 3.3 percent in the July-September period over a year earlier, the fastest rate since the fourth quarter of 2011.

A South Korean street vendor arranges a stall of stockings in Seoul, South Korea. Pic: AP.

From the previous quarter, Asia’s fourth-largest economy expanded 1.1 percent, the same rate as the previous three months. The figures underlined that South Korea’s economy is on track for a modest recovery. Quarterly growth had been less than 1 percent for eight quarters until picking up in the April-June quarter this year.

The central bank said export growth was weaker in the third quarter but construction investment led growth.

Capital expenditures turned higher in the July-September period after shrinking for more than a year thanks to increased spending on autos and transportation equipment.

But the bank said the economic recovery is uneven between the country’s top companies, such as Samsung Electronics Co. and Hyundai Motor Co., and small firms.

“Big exporters and big-name manufacturers are doing significantly well but small firms are not,” said Jung Young-taek, director-general of the Bank of Korea’s economic statistics division. “Growth pace is solid but there is a growth gap between different sectors.”

The bank forecast South Korea’s economy will likely expand 2.8 percent in 2013.